Aligning Agent Performance Metrics
SQM Group's research shows that 71% of senior call center executives strongly agree that improving a call center's customer experience (CX) performance is their top priority. Furthermore, high-performing call center's measurements of success for CX are First Call Resolution (FCR), Customer Satisfaction (Csat), and retention.
Tracking, benchmarking, and analyzing call center agents' performance metrics should align with the enterprise-wide strategic goals. For example, if the enterprise goals are to improve CX and retain customers, agents should have accountability metrics that align with those goals. When a call center aligns with enterprise-wide strategic goals, it's a way to show how they add value.
In addition, SQM's research shows that 30% of calls are non-FCR for the call center industry. Furthermore, agents are the source of error for 40% of non-FCR calls. Moreover, 40% of the time a call is unresolved, the agent had a will issue versus a skill issue. Therefore, there is a tremendous opportunity to create more customer service accountability in the agent position to enhance CX.
SQM's experience is that most call centers that improve customer service do so by creating agent accountability for customer service metrics and reducing the agent source of errors for repeat calls to resolve an inquiry or problem. Moreover, improving customer service based on motivating and creating more agent accountability tends to be quicker than fixing the organizational source of error issues.
Organizations trying to be more customer-centric are not holding their agents accountable for only efficiency Key Performance Indicators (KPI) metrics (e.g., AHT, schedule adherence, and calls handled) but emphasizing customer service effectiveness KPI metrics (e.g., FCR, Csat, and retention). As a result, in many cases, customer-centric call centers focus on effective KPI metrics, and they have dramatically transformed an agent's performance metrics used for their goals and accountability.
When call centers rely primarily on agent efficiency metrics, it can create poor agent behaviors that negatively impact CX. On the other hand, when call centers emphasize agent effectiveness metrics, their CX improves and adds more value to the enterprise-wide strategic customer service goals.
SQM Group's benchmarking of over 500 leading North American call centers' research showed the top 25% performing call centers for customer service (e.g., high FCR and Csat) have in common is the emphasis on using agent effectiveness performance metrics. Therefore, high-performing call center agents are primarily held accountable for effectiveness metrics such as FCR, call resolution, and Csat.
Top 5 Performance Metrics
Call centers miss out on delivering great customer service without the right agent performance metrics. Call centers can use many KPIs to create accountability for agent performance, but only a handful of agent metrics drive customer service and efficiency improvement.
Agent performance metrics used for accountability should represent areas they have control over. The below agent metrics can be viewed as balanced scorecard metrics because they positively impact effectiveness (e.g., customer service) or efficiency (e.g., cost per call). The ranking of importance for the top 5 call center agent performance metrics is the following:
1. First Call Resolution
First Call Resolution is a metric that measures an agent's performance for resolving customer interactions on the first call or contact, eliminating the need for follow-up contacts. Call centers use internal and external methods to measure FCR.
In addition, in many cases, call centers use the call resolution metric for agent accountability instead of FCR because it can be easier to measure. For agent performance accountability, it is common for either FCR or call resolution metrics to be used but not both metrics.
FCR is the KING of all call center metrics because it is a gateway CX metric for Csat, referrals, and retention business outcomes. Put differently, when FCR goes up, so does Csat, customer referrals, and retention.
At SQM, we are often asked, "Why FCR is the most important agent metric?" FCR is not only a measure of operating efficiency but also measures customer service effectiveness. For example, for every 1% improvement in FCR, you reduce your operating costs by 1%. Furthermore, for every 1% improvement in FCR, there is a 1% improvement in Csat. No other metrics provide such powerful performance insights.
93% of customers expect their interaction to be resolved on the first call or contact, which is the best way to create customer satisfaction and retain customers. Call centers that measure, benchmark, and track FCR at the agent level consistently improve call center FCR performance. SQM research shows that call centers measuring FCR or call resolution at the agent level for a year or longer reported an increase in their annual FCR rate from 1% to 10%.
2. Customer Satisfaction
The customer satisfaction metric quantifies how satisfied customers are with agents for helping them with resolving their interactions. The agent Csat metric is viewed as a KPI and is the most popular customer service effectiveness metric used by call centers.
Furthermore, the Csat metric is a driver for customers referring an organization to others, willing to purchase more products and services from the organization and continue to do business with an organization.
The Csat metric provides call center agents with the voice of the customer (VoC) feedback on how satisfied they are with the service they experienced and provides insights for improving how an agent could deliver great customer service.
Csat agent feedback should focus on moments of truth they control, such as caring, helping, and resolving the customer's interaction. Furthermore, if a customer is dissatisfied, you may discover opportunities to provide additional agent coaching and training to handle specific call types.
3. Net Retention Index
The Net Retention Index (NRI) metric is used to help determine interaction customer retention when using a call center. An interaction NRI is based on a customer using a call center, which differs from the traditional NRI based on the customer's overall relationship with a company.
The interactional NRI is determined using a post-call survey to ask customers how likely they are to continue doing business with XYZ Company based on their call center experience. The NRI question uses a scale of 0 to 10, where 0 means "Not at All Likely" and 10 means "Extremely Likely".
Many call center leaders believe that interactional NRI is an appropriate metric to evaluate their contribution to customer retention. Furthermore, in many cases, the call center is the last line of defense for stopping customers from defecting to another organization. As a result, the interactional NRI is an excellent indicator that the call center is helping the organization maintain or improve customer retention.
For call centers that want to improve interactional NRI, it is essential to state that FCR and Call Resolution improvement will improve customer retention. SQM Group's research shows that 95% of customers intend to continue doing business with an organization when First Call Resolution is achieved.
Some agents dislike NRI because they have limited control over pricing, policies, products, or services. However, if agents improve call resolution, it will also positively impact helping retain customers. Moreover, more agents prefer NRI versus NPS because they feel one of the primary purposes of an inbound call center is to help retain customers.
4. Customer Quality Assurance Score
Customer Quality Assurance (CQA) combines call compliance metrics, judged by a QA evaluator, and service quality metrics, judged by a customer via a post-call or email customer survey. The CQA evaluation scoring is 100 points, comprised of 60 points available based on customer survey results and 40 points available based on call compliance metrics. CQA is one of the best practices for driving improvements in the FCR rate and customer service.
If CQA is properly implemented, a contact center can expect up to a 10% improvement in FCR. That means for an average call center performing at a 70% FCR rate, if they improved by a 10% FCR rate, they would be performing at the world-class FCR rate of 80%. Unfortunately, only 5% of the 500 leading North American call centers we benchmark on an annual basis can achieve the world-class FCR rate of 80% or higher when the customer is the judge for determining whether FCR is achieved.
Again, it is essential to emphasize that in approximately 40% of calls that are non-FCR, the agent was the source of error, and in over 40% of non-FCR calls, the customer felt the agent could have done more to resolve their call. Put differently, in many cases, for non-FCR calls; there was an agent will issue. However, there is an opportunity to improve FCR by focusing on agent will and skill issues. CQA is one of the best practices for addressing agent will and skill issues hindering FCR and customer service.
5. Average Handle Time
Average Handle Time (talk time + wrap-up time) measures how long an agent spends completing customer interactions. Many call centers evaluate agent AHT because they want to reduce cost per call and call wait times. In many cases, agents that have lower AHT are more efficient and effective at resolving customer interactions. Therefore, they tend to have higher FCR or call resolution performance.
SQM research showed customer service call centers' AHT in 2019 was 545 seconds, and in 2021 AHT was 589 seconds, which resulted in an 8% increase. SQM's view of the higher AHT is primarily due to high agent turnover. A higher proportion of agents have less tenure and less knowledge, skills, and abilities to resolve calls. As a result, the new agents have driven lower Csat and higher AHT.
Placing too much emphasis on AHT can be problematic. For example, if agents are being rushed to complete calls quicker, the FCR and Csat can suffer. In addition, most customers do not want to be on a lengthy call but prefer a longer call than calling back two or more times to resolve their initial inquiry or problem.
If AHT is higher for an agent and has lower FCR and Csat, it would indicate that more coaching and training are needed. Therefore, the agent AHT metric should be used with other metrics to determine agent performance. Evaluating AHT on its own could mask other customer service or efficiency issues and also send a message that the call center leadership only cares about productivity.